GST
Composition tax rates for traders, manufacturers and restaurants
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Facts
Composition rates are 1 percent of turnover for manufacturers, 1 percent of turnover of taxable goods for traders, and 5 percent for restaurants not serving alcohol. These are split equally between CGST and SGST.
Provisions and law
- Rule 7, CGST Rules 2017Composition rates: 1 percent for manufacturers and traders, 5 percent for restaurant service
- Sec 10(1), CGST Act 2017Eligible registered persons with aggregate turnover up to Rs 1.5 crore in the preceding year may opt to pay tax at composition rates
Analysis
Example: a trader with Rs 25 lakh taxable sales in a quarter pays Rs 25,000 (Rs 12,500 CGST plus Rs 12,500 SGST). For traders, exempt goods sales are left out of the base. A restaurant with Rs 20 lakh quarterly sales pays Rs 1 lakh. The tax must be paid from your own pocket, since you cannot charge GST to customers. Check the latest rate notification before filing.
Conclusion
- Find your category: manufacturer, trader or restaurant
- Apply the rate to the right turnover base
- Set aside the tax each quarter
- Pay through CMP-08 by the 18th
A Savvy can do this for you
Opting into composition, CMP-02
₹999
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